SINGAPORE: Asian refining margins for jet fuel rose on Wednesday, buoyed by expectations for airline capacity recovering further in coming months, but sluggish aviation demand in China continued to cap gains.

Refining margins, also known as cracks, for jet fuel rose to $29.23 per barrel over Dubai crude during Asian trading hours, compared with $27.45 per barrel a day earlier.

The jet fuel cracks, which have climbed about 45% in the last two months, were currently more than 200% higher compared with their ten-year seasonal average for this time of the year, Refinitiv Eikon data showed.

“Asia-Pacific is playing catch-up on restarting travel after COVID-19, but there is growing momentum with governments lifting many travel restrictions. The demand for people to travel is clear,” Willie Walsh, director general of the International Air Transport Association (IATA) said in a keynote address at the Changi Aviation Summit on Tuesday.

Walsh, however, said the ongoing curbs in China would weigh on the Asia-Pacific market.

“So long as the Chinese government continues to maintain their zero-COVID approach, it is hard to see the country’s borders reopening. This will hold back the region’s full recovery,” he added.

Global airline capacity stood at 90.5 million seats in the week to Monday, 17.8% lower compared with the corresponding week in pre-pandemic 2019, but the capacity is expected to exceed 100 million seats within the next couple of weeks, according to aviation data firm OAG.

Total scheduled airline capacity in South Asia rose 0.3% this week, while capacity in Norteast Asia slipped 1.8% from the previous week as Chinese airlines trimmed capacity by 293,000 seats, OAG data showed.